O'Brien and O'Reilly rivalry takes new turn

Denis O'Brien's questioning of Sir Anthony O'Reilly's remuneration and expenses in Independent News & Media (IN&M) marks a new turn in the rivalry between the two of the wealthiest tycoons in Ireland.

Mr O'Brien's ultimate intentions for his 8.35 per cent investment in IN&M remain secret, but he is widely assumed to be preparing to bid for the group at some point in the future. Precisely when is a matter of speculation.

While Mr O'Brien has said very little in public about IN&M, it now emerges that one of his companies - Baycliffe - sent a series of letters to directors of the group in which he questions aspects of its governance and policy on pay and expenses. His intervention has all the hallmarks of a warning salvo over Sir Anthony's considerable defences.

The most sensitive of those letters was sent on Tuesday of last week to Dr Ivor Kenny, chair of IN&M's remuneration committee, and Brian Mulroney, chair of its governance committee.

Baycliffe director Christopher James Tushingham is understood to have tabled eight questions in that letter. IN&M's spokesman said he wondered why questions were being asked, the answers to which were clearly set out in the annual report and accounts.

Baycliffe first asked IN&M to set out the procedures for the payment of expenses to its chief executive, Sir Anthony, and other executive directors. In particular, he asked who approves Sir Anthony's expenses. IN&M's spokesman said: "All expenses are approved by the deputy chairman as delegated by the remuneration committee."

The deputy chairman is Liam Healy, former chief executive. The spokesman said IN&M didn't regard that as unusual. "All expenses incurred by the other executive directors are approved at the appropriate level."

Baycliffe asked whether IN&M or any of its subsidiaries or associated companies pays any staff or other costs, expenses or allowances in respect of private residences owned or occupied by the chief executive.

The question referred to Sir Anthony's homes at Fitzwilliam Square in Dublin, Castlemartin in Co Kildare, Lyford Cay in the Bahamas and any other residence he owns. "Were such payment to have been made, that would have to be listed as a benefit-in-kind in the annual report. There is no such entry," IN&M said.

Baycliffe asked IN&M to specify any and all such payments made during the financial year 2005 and 2006. Again, the spokesman referred to absence of benefits-in-kind in the annual report.

"The accounts are subject to approval by the board, by the relevant committees and to audit by PwC." The Irish Times asked whether IN&M paid business expenses to the chief executive in respect of costs incurred in private residences owned or occupied by him. "Where Independent uses the private residence of any executive for a company function, the costs related to that function or event having been appropriately approved are paid for by the company," said IN&M's spokesman.

Baycliffe asked were there any payments made to the chief executive by any subsidiary, or any associated or related parties of IN&M. The spokesman said the annual report covered everything. "It covers every single subsidiary as well as the parent."

The next question asked was if there were any costs, charges or expense recharged by IN&M to subsidiaries or associated companies in relation to the chief executive. "Any benefit conferred up or down has to be shown in his benefit-in-kind in the annual report and there is no entry under benefit-in-kind," IN&M said.

Baycliffe asked whether IN&M or any of its subsidiaries or associated companies ever charged a boat for use by the chief executive. "Were such a payment or benefit conferred it is required that it be listed under benefits-in-kind. The annual report shows that Sir Anthony has received no such benefit." IN&M's spokesman said "no" when asked by The Irish Timeswhether IN&M has paid business expenses to the chief executive in respect of costs for the charter of a boat. Baycliffe in its final question asked IN&M to advise it as to the level of Sir Anthony's remuneration. "His entire remuneration is set out in the annual report and he receives nothing beyond that." Sir Anthony's remuneration was €1.82 million in 2006.

The company holds an annual general meeting in Belfast on Wednesday.